People are flying domestically again, though it’s mostly leisure travelers and there are signs demand may be plateauing and may even decline in August as COVID-19 cases rise in parts of the country. Airlines are bringing back flights and seats faster than demand has returned, too.
Internationally though planes remain empty but the flights that are available seem to work because of cargo – at least that’s the bet airlines are making.
A world in which there are plenty of empty seats should be a bonanza for frequent flyers looking to use their miles. Airlines traditionally want to make unsold seats available to members at the lowest prices.
- A seat that takes off empty can never be sold. So they might as well get some value out of it.
- Airlines hold back seats because they’re not always sure when those seats will go out empty. They might guess wrong, give a seat to a mileage member at the saver level, and then not have the seat for a paying customer.
- That’s why some of the best award availability historically has been last minute – when airlines are absolutely sure there will be seats going empty, and there are still plenty of seats left to sell to last minute customers.
Some airlines have been careful about giving away too much first or business class award space, out of fear of ‘cheapening the product’ for people who are paying full freight (or deep discount corporate fares). And airlines don’t want to give away a seat for miles to a member who would have otherwise paid cash.
Nonetheless looking at empty flights with plenty of seats on the day of departure, and still no award seats available at all, tells us something I think. And thus is the saga of American Airlines flight 106 tonight from New York JFK to London Heathrow. Here are that flight’s current loads:
| First | Business | Prem Econ | Main | |||||
| Capacity | 8 | 52 | 28 | 216 | ||||
| Confirmed | 4 | 11 | 24 | 138 | ||||
Tonight’s flight is mostly empty. First class has half its seats still available. There are only 11 people confirmed in business classs and the cabin holds 52. There are 78 seats to sell in coach. That’s all without any overbooking, and accounting for no shows (which have been high during the COVID crisis).
So let’s check for saver awards. There are none available for any cabin.
How much does American want for award seats on this flight?
Today’s Dallas Fort-Worth – Tokyo Narita flight is even more egregious, because it’s even more empty.
| First | Business | Prem Econ | Main | |||||
| Capacity | 8 | 52 | 28 | 216 | ||||
| Confirmed | 0 | 6 | 6 | 25 | ||||
This flight has no saver awards, either, in any cabin:
Just so you don’t think I’m cherry picking, or that there’s something special about the airline’s Boeing 777-300ER flights, let’s take a took at Dallas – Paris today.
| Business | Prem Econ | Main | ||||
| Capacity | 20 | 28 | 186 | |||
| Confirmed | 9 | 7 | 23 | |||
Again, no awards in any cabin:
I can do this all day. Here’s Dallas – Amsterdam:
| Business | Prem Econ | Main | ||||
| Capacity | 20 | 28 | 186 | |||
| Confirmed | 3 | 4 | 32 | |||
No saver awards here for any cabin, either. This also means, by the way, that American’s partner frequent flyer programs cannot access award space on these flights either (since only saver inventory is available to partners).
At some point a mileage program has to give members a break, when they’re absolutely certain they’ve got seats that will go unsold, don’t they? And what does it say that they choose not to do so?
It’s one thing to argue that they need to be conservative booking far in advance. They don’t know how many seats they’re going to sell for certain. And things are even tougher to predict now than before (although we can predict with pretty good confidence that most international flights will be full). Today’s departures, on mostly empty flights, are a certainty.
American’s flights do generally have upgrade seats available. If you’ll buy a coach ticket you can spend miles and cash co-pay, or use a systemwide upgrade, to get into business class (or buy business on 777-300ER airfact you can fly first). But you have to spend money on a ticket before American will make its unsold seats available to you as an AAdvantage member on this flight. Which is, effectively, adding fuel surcharges onto their award tickets.
I actually love my American AAdvantage miles. They’re the currency that I’ve redeemed the most. But it’s almost always to fly on their partners – like Japan Airlines, Cathay Pacific, Qantas, and Etihad – and not to fly on American Airlines. The partners offer a better inflight experience, and American wants way too many miles to fly on its planes.
Even when there is saver availability on international routes it’s very difficult to find domestic connecting availability or to avoid the married segment crap. They’ve made it so that even when you are able to piece something together internationally you have to position on separate tickets. That was already a hassle and added to the cost. It’s especially problematic when you take into account various travel restrictions and difficulties with collecting bags in certain jurisdictions, especially abroad. I think their focus right now is on mileage saver awards and getting people to redeem in what is essentially a dynamic model. The truth is that probably is working for a very significant number of members who are looking at “77k” or “24.5k” and thinking “that’s not bad,” etc.
Very few saver awards as we have known for quite some time. But they still hawk those mileage credit cards on recent flights I have been on. AA has a liability with what they owe frequent flyers as I’m sure there are billions of miles unused out there. You would think they would open up with all this available capacity. It does not make sense even from a business model.
I think this will change in a month or so. Right now, people are leisure travelers in the sense they aren’t travelers traveling for business. They aren’t really traveling for fun either. It’s for personal business. They still aren’t price sensitive passengers. When the airlines realize their load factors aren’t high enough as they expand routes or cargo dries up, the saver awards will too.
My theory is that there is vanshingly little leisure travel in the US today, particularly internationally. If any occupied seat is obligatory travel, the airlines will want to get paid cash for that seat and making saver awards available undercuts that real revenue stream.
Increasing award availability wouldn’t meaningfully spend down their award liabilities (which they are going to devalue after all this anyway) because people are afraid (or unable) to travel. Get the cash while you can to make the next quarter look less dismal.
Gary you know the accounting better than the rest of us. Am I right in remembering that they book the revenue for award flights when you actually fly?
In normal times, Airlines would be most interested in revenue, to boost their profits and hence their stock price.
Perhaps this situation tells you that right now, the only thing that matters is cash. If they allow 20 people to book award seats and 19 of those seats would have gone out empty, that’s great for revenue. But if one of them might have paid cash for a ticket on AA, that’s a dollar less cash than the alternative.
Note I am taking as a given that their concern for their frequent flyers and the long term brand value is worth a total of 0 in either case.
AA and others are just using their mileage programs to sell miles which usually turn out to be a bad buy. They advertise awards at saver prices then up-sell you when you try and actually book something. I’ve been booking saver awards to Europe and Mexico from a secondary market for 20 years. Saver award without crappy long connections are never available period.
I book within the first 2-3 days the schedule is loaded (sometimes connecting partners are loaded a day or two late). I can always get 2 coach seats but getting 4 seats means either getting lucky with 4 seats being available or often making the bookings at the exact same time from two different devices from 2 different FF accounts. When you go to the seat charts there are often none taken but few decent ones available. I’ve been doing this a few times a year for 20 years and nearly every flight is canceled or rescheduled about 6 months out and they always screw you on the then available seats on the rebooking so seat selection is a hope and prayer affair 11 months out. I’ve even been able to book flights at AA on routes has been canceled for years (direct RNO to ORD- the old Reno air route). I know they will not discover the error until 6 months out. The AA schedulers for PHX are some of the worst in the industry and often pad flight times (thanks Dougie) that causes illegal connections and long lay overs as a consequence when rebooked. As a former Logistics Manager I know this is just basic incompetence which is what I have come to expect from all airline travel.
I have used miles to book saver award tickets for over 20 years and if I had to pay to fly these routes, I would not- it’s not worth it to PAY for the abuse, delays, incompetence and in efficiency. The only way I can tolerate it is to know it was almost free- except for landing taxes, fuel surcharges, security fees, visa fees etc etc.
Only 700k AA/UA FF miles to go and I’m done. I don’t even take the CC card deals anymore. I’m sticking with cash bonuses instead as cash is still king.
ps brokerage cash bonuses have been great recently- and it’s real money not pesos or lira
We had British Air First Class award tickets from Newark NJ to Tel Aviv in June that had to be cancelled due to the virus. It is a major family trip. We rescheduled it for the same time next year and I went to rebook the BA tickets. I found NO First Class tickets available and for the heck of it, checked every day going back two week – nada. Will probably choose to go Iberia whose Business Class is far, far better than BA’s. But upsetting that it seems they no longer offer First on awards. Had that been your experience Gary?
Waiting for all the HAAters to come at you again Gary like they always do whenever you write a piece critical of AA
United has no shortage of flaws and anti-consumer behavior at this point, but at least they would be releasing max upgrades/awards on their equivalent flights this close in
A week out I’m seeing plenty of saver space. Maybe they just don’t want or need people booking awards at the spur of the moment?
I think AA is increasingly just using the variable-cost “websaver” award space rather than published “saver” space that maps to an award chart. That’s yielding a cost of 98k points one-way for JFK-LON in business class (from your screenshot). Delta and United are charging far more far more points for their transatlantic business class award seats today:
Delta is charging 320k points one-way for JFK or ATL to LON or CDG in business and 360k points one-way for ATL-TYO in business today. Oddly Delta isn’t even offering award seats on DTW-TYO if you try to book only that sector.
United is charging 158.5k miles one -way for business class EWR-LON or EWR-CDG. UA TYO pricing is much more favorable: 73k miles for EWR/ORD-TYO tomorrow in business class.
I’ve heard they’re searching the couch cushions for loose change to pay for 17 737-MAX planes this year…amusing that you think they should do the right thing and burn miles off their books during the downtime…
Gary-
Good post.
Readers should keep these factors in mind when they value their FF miles, especially with airlines like AA and UA. Valuations of more than a penny a point are suspect, and thus non-bonus spending should be almost always be for cash back, for which 2-2.5 % are easily available.
And cash is pretty easy to value, with 100% availability to use it.
@NYCSean2
I think you have it exactly right.
And they aren’t really interested in redeeming any awards, just selling miles.
I figured out years ago that AA’s stinginess with award seats made acquiring their miles a worthless exercise. So, I ceased playing the mileage game, as well as applying for credit cards with AA miles as the reward. Instead, my credit cards recompense me in cash which I find more valuable than miles. However, until a sufficient number of people feel the same way, AA will continue with their meager award availability.
Makes perfect sense from a business standpoint. During the worst travel period of the pandemic very few people traveled unless they had to. Therefore those that did weren’t necessarily as price sensitive as usual. Why would any business sell their product for less than people would pay? I seriously doubt the lack of saver seats kept anyone from booking an award ticket that had to travel and AA was able to burn off additional miles therefore reducing their future obligation.
Always amazes me how people either think airlines, hotels and other businesses “owe” them a deal. Get real people – SMH!!
@Gary – Are JAL first class award seats still unavailable after March. I’m seeing plenty of nothing for May/June to ORD. With Cathay not offering a second first class seat to partners anymore, JAL is the last great hope to Asia.
@NYCSean2
I think you’re exactly right.
If 20 people are looking to use miles for a trip, and no Saver awards are available, maybe 1 out of those 20 will pay cash. Maybe even 2! so the heck with awards and take the cash.
Seeing lots of saver availability on AA but only when married with a connection.